Ask the Readers: How to Talk to Friends and Family About Money?

Last spring, Andy submitted a question he hoped readers could help him with. I promised I’d post it…and then went to Alaska for ten days and forgot. Well, Andy’s a patient man. And persistent. Last week, he dropped me a line again because he’s still wondering: How do you give advice about money to your family (and friends)?

Here’s Andy’s story:

My family had plenty of money when I was growing up, but we never talked about the subject.

My father was always very frugal (a trait I inherited, for better or for worse). I had an allowance, which I would sometimes spend on baseball cards, or other times save up for something big in the future. I guess I kind of followed my parents lead and never really bought overly expensive stuff, or much Stuff in general.

My brother is quite a bit different than me. Throughout college (and even post college) he made some common financial decisions for someone that age and ended up with a lot of debt. Even now that he’s older and has a family, I still feel like he struggles with money. I really, really, REALLY want to approach him and offer him some advice, but I just don’t know how. A similar situation exists with my wife’s father and step-mom. Maybe my apprehension is because these family members are older than me? Maybe it’s easier to talk to people about money who I know manage their money well versus people who don’t?

I feel like I’ve done a damn good job at managing my money during my college and first few post-college years. I feel like I have a lot of good knowledge to share, and I could really help my family members, but money seems to be an awkward and touchy subject in our society. I’m not sure if it’s a personal thing or if it’s this way with everyone — talking about personal finance with (most) friends and family is kind of taboo.

What’s a concerned family member to do? Become a professional financial planner? Bite the bullet, take the bull by the horns (insert your cliche of choice here) and just approach my family members honestly and directly?

In his most recent e-mail, Andy told me it’s not just family members he wishes he could talk to, but friends, too.

“I’ve noticed it’s a pretty big issue among friends as well,” he wrote. “I feel like most of my peers lack financial skills and responsibility. (That said, the flip-side of that viewpoint is that I’m just being a cheapskate, saving too much, and people can spend their money however they want!)”

Outside Looking In
This is actually a situation I wrestle with from time to time. I think we all do. I see friends (and family members) who are struggling, and see some obvious things they could do, but I don’t know how to help.

For instance, I have one friend who refuses to accept responsibility for her income. She’s a smart woman, but she lives in squalor. She blames her state on everything and everybody else. She doesn’t see that she could help herself by being willing to work two (or more) jobs, by avoiding the bars, by giving up cigarettes and pot. In her mind, her lousy income just shows how unlucky she is. It’s not her fault. Any practical advice falls on deaf ears.

I have another friend for whom only the best will do. Though his family is pinched financially (they often complain about money), he constantly talks about the new things he wants — and they’re always the most expensive possible examples. He buys (or wants to buy) the most expensive computers, clothes, and kitchen supplies. He eats at the most expensive restaurants. And so on. I’ve tried to offer casual advice — “Maybe you can find a good deal at a thrift store.”, “Let’s eat at the corner cafe.” — but it’s never well received. Instead, I just don’t say anything.

I wonder if that’s how people used to feel about me back when I struggled with debt? Most people never said anything. Maybe they didn’t see the problem, or maybe they didn’t feel it was their place to share.

Talking with Friends and Family About Money
Why is money a taboo topic? Why aren’t more people willing to talk about their finances? I think it’s because nobody likes to be judged. Everyone thinks they’re doing the best they can possibly do — and even if they don’t think that, they don’t like to be called out.

Often, your friends don’t actually think they’re doing the wrong thing. As Andy suggests, they might think you’re a cheapskate. Each person is in a different place. Though you may have friends and family members who could profit from what you’ve learned, if they’re not ready to listen, you run the risk of doing more harm than good when you offer advice.

In the past, I’ve recommended the following as subtle ways you can help someone who’s struggling:

Lead by example. Suggest cutting back on the family gift exchange this year. When you go out to dinner with a friend, choose cheaper alternatives. Bring home books and CDs and DVDs from the library. Don’t make a big deal out of things — just do them. Rather than goad your friends and family into saving, be an example of what can happen through smart money choices. (I talk excitedly about how cutting back on other stuff has allowed me travel, for instance.)

Be willing to answer questions. When I was struggling with debt and poor choices, I could see that certain people in my life (such as my wife) had their finances under control. Sometimes I would ask questions. I asked my cousin about mutual funds, and he explained them to me. For a time, I even put money into them. (Then I pulled it out to buy a computer.) Be available as a resource.

Use the soft sell. When my friend Michael listened to my complaints about money in 2003, he didn’t make a big deal out of it. He told me his financial story, and then mentioned a book he liked called Your Money or Your Life. He didn’t lecture. He didn’t try to convert me. He simply spent a few minutes explaining how he’d solved his problems, and then he let it go. A few days later, a copy of Your Money or Your Life appeared in my mailbox, and I knew it was from him. That was enough.

I’m curious how other Get Rich Slowly readers have handled this kind of situation. How do you encourage your family and friends to make smart choices with money without making them defensive or angry? What mistakes have you made in the past? What techniques have you found that work? Does a person have to hit rock bottom before they’re ready to listen?

Often, I actually talk about finances to everyone, which I found that most people don’t like….

When I do want to confront someone though, I first decide if I can trust them with some information of my own. Many times, rather than giving general advice, it can really help to give actual figures of your own.

Besides this, be ready to listen and limit your advice. When they know that you are there to talk, they’ll come to you on their own terms. If they do not want to change, all of the advice in the world will not help.

Although it’s hard, I think it’s important not to offer unsolicited advice. You’re right that people feel judged (and maybe they are) when we try to tell them what they’re doing wrong.

If a friend brings up the topic, I ask them what kind of help they’re looking for. Often, people are just complaining and don’t really want to change anything.

Over 20 years, my husband and I tried to help my bipolar mother-in-law with her finances. To those who don’t know, one of the common behaviors of people with that condition is a desire to be grandiose in their spending. For years, we lectured, made budgets, and paid her bills. And we were miserable. I’m sure she was too.

Eventually, we realized she could not change. So we determined how much of our finances we were willing to use for her support and tried to let everything else go.

If she wrangled Sears into giving her a credit card and then charged it up without paying, that was no reflection on us. It was hard not to feel judged by people stung by her behavior. But we could only do our best and let Mom do her best.

Although this is an unpopular sentiment in America, you can’t fix everything.

Sometimes you just have to love your friends and family they way they are, let them make their own mistakes, and figure out how and if you can help them when they ask for it.

1) Everything you see from a friend/family member may not be all that there is. If you saw me on NewEgg or Amazon you might think I didn’t have my finances in order because I tend to drop a lot of money at once and use my credit card. Not true. It’s just a matter of my personality. I tend to buy everything I need at once and then go months without making another purchase of the same type. It’s budgeted, but it may not look like it from the outside. I like the protections my credit card offers and I pay it off when the bill is due.

2) The thing this article doesn’t mention is to come in from a position of concern. You are concerned for that person–say it! To me it makes a big difference. I am much more likely to listen to someone about personal issues if they mention concern for my health or well-being.

A couple of real-life examples (one positive, one negative):

1) My mother gets two pensions from previous jobs and hadn’t figured out how to apply for it, what they covered, etc. Whenever I’d ask about retirement, she’d say, “Oh, I’ll be fine.” That drove my number-crunching self crazy. So I’d casually bring it up every once in a while, and that got her to at least get the paperwork together and get the numbers (~1 year). Then, when I found that out, I started working on the “enough” part of the statement. I told her, “Mom, I love you, and I’m really concerned with making sure you’ll be okay in retirement. I know that you want to help your kids, but I’d much rather you’d be able to take care of yourself and be able to do the things you want to do when you get older. I know that the money you’ll get will cover you now, but have you actually sat down and figured out if the money will cover you ten years down the road after inflation?” I’ve been working on that one a year. She’s not sat down and figured out the exact numbers, but now she’s making life choices based on that number. She’s getting out of a house that would drain her retirement (which I’ve been saying for years), and she’s started a 401k to get the match and keep the money safe. It takes time, love, and persistence to make progress.

2) My other example would be a close friend. He complains he doesn’t have money, and then ignores all suggestions. I’ve mentioned that I want to help, but when he’s obviously not receptive I back off. I believe the conversation went something like,

Friend: “I have no money for Y game/food/entertainment.”
Me: “Well, what’s going on?”
F: “I need to save for summer rent.”
Me: “Oh? Why?”
F:”My job doesn’t pay over the summer.”
Me: “Oh, but you live right behind a gas station and you’ve done that for years. Are they hiring? You could totally get a part-time job, work <20hrs a week (way less than the 40 you are working now), and have rent AND game money."
F: "Yeah, that sounds like work."
Me: "…"

I've had conversations where I've pushed harder and they've basically said, "Yes, I know I can improve my situation. I know how to do it, and thank you for the suggestions. I'm not going to do it, so leave me alone about it."

Make sure you know the type of person you are talking to. And, if you do it with care and concern, you can still be friends afterward.

Oh, I also have a sister that asks for advice (actively solicits!), lets me draw up papers and schemes, thanks me, and then ignores it all. :

Even though I’ve wanted to help a few relatives of mine, I realized that even a soft sell doesn’t work for them.

I found that being a listening ear when the car and offering a couple (2, maybe 3) ideas on how to help their specific financial problem can get through a bit more.

I also learned through the years that helping out with money is usually not the best course. Instead I’ve learned to wait and see if they follow the advice or if they actually come up their own solutions.

Some have and they’re starting to get their finances in better control. From there, I try to be a source of positive reinforcement.

It’s not a perfect plan, but it’s what’s helped me maintain relationships with family and friends in regards to money management.

I’m the acknowledged cheapskate of my family. It’s a combo of having less money than my sibs and having different expenses and goals. I cancelled cable (and where I live that means we get three stations). To me, it’s not a big deal. I’m not frugal imo. We still have expensive internet access. But my family makes fun of me.

Does my sister want my advice when she complains about money? No. I could tell her how stupid it was to buy new dining room chairs and an iphone when she knew she was having a second baby and her job is potentially on the chopping block. That is not my business. And it won’t promote family harmony.

Lead by example is the best advice. And give people the opportunity not to further indulge bad habits. If they suggest going out, invite them over instead. It’s a win/win.

They may learn new habits, but mostly you aren’t part of their problem. When they are ready to change, they will know that your friendship or relationship isn’t about shopping or other spendy outings.

I don’t believe in rock bottom. You don’t need your life to be a disaster to try and change it. I didn’t anyway… People aren’t stupid. It’s common knowledge that you should that you should save money for a rainy day.

I have to realize that it’s not the lack of knowledge that keeps people from winning with money, it’s the lack of desire. So the only way you can really help people is by explaining why you have your desire. When they truly get a desire, they will be coming to you for advice.

Sometimes I let social media do the talking for me. If I see an article or book with good advice, I’ll post it to Facebook or Twitter. I’ve been surprised by the people who read it or “like” it who would probably ignored that same article if I had emailed it to them or shut their ears to the advice had someone suggested it.

Unfortunately, it can be very hard to fight against people’s perceptions of you. In my family, weight is the issue not money. It scares me that the people I love are at serious risk for diabetes and cardiovascular disease, but I feel like they see me as just another female obsessing over weight and as someone who doesn’t “know how to live” because I’m not overindulging. I’ve also learned I can be as defensive about my lifestyle as they are about theirs, so any conversations on the topic rarely go well.

Life would be so much easier if you could just grab people by the hand and yank them off the dangerous path they’re taking. Unfortunately, it doesn’t work like that.

The best I’ve come up with is to find a channel for dropping subtle hints without talking to people specifically. Have a blog or participate on facebook? Use it. When you read a good personal finance book or article, mention it. Don’t just mention that you read it – mention the parts that stood out to you, and why you think they’re important.

If your friends and family are keeping tabs on you and reading what you write, they’ll notice. Since it’s not openly directed at a specific person, they won’t feel as awkward.

Simply put, unless someone asks you directly for advice, then it’s not your place to comment. No good can come of trying to stick your nose into someone else’s private business when your advice is unsolicited.

If you think that someone in your life could benefit from hearing the wisdom you’ve gained in your financial journeys, then simply share your experience without trying to link to what the other person is going through. For example, saying “I’ve been really feeling good about my finances lately. I used to make a lot of mistakes, but then I found a great book that helped me out enormously!” gives the other person a wide open opportunity to ask more if they *want* information, without casting any judgment on their actions.

If your friend/relative does ask you for advice, don’t assume it means you can open the floodgates and let loose with all the stuff you’ve been wanting to say. Try to quantify what they’re looking for information on before you talk to them. “Do you need some resources, or did you just want my opinion on some options you’re considering?” Even though they are approaching you, it doesn’t necessarily mean they are ready emotionally to face all their problems head on. It just may mean they’re taking the first tiny steps towards facing it.

I find it’s all about control….namely, how other people want to have it over you.

My parents have never been money smart (and they are paying for it as they near retirement age), but if I don’t spend my money the way they want, I’m reckless, irresponsible, and a bad role model. The fact that I’m 32, have 100K in investments, another 175K in my 401k, and am a few months from paying off my condo doesn’t mean anything to them.

On the other side are my coworkers and “friends”. In their mind, I should be spending money because I’m single. Taking trips all the time, buying new things, spending well beyond my means. They always joke they want to live vicariously through me, but so many of them are far better of financially than me, and they’ve already had far more fun in their lives then it feels like I’m ever going to have in mine. I remember taking my very first paycheck out of college and putting it immediately towards paying off debts. One of my coworkers took their first paycheck and spent it all on Red Sox tickets, despite being deeper in the hole than I ever was.

In both situations, rational conversation never seems to enter the picture. My parents are looking for an additional channel for support, and their games are the way they want to influence what I do. My coworkers/friends seem to compete in terms of societal status, and my attempts to do better threaten their position.

All I want is to not be house-poor anymore, and feel like I can take time to enjoy some of my success. However I’m either branded an idiot for not doing everything someone else says, or an idiot for not living paycheck to paycheck.

When I take time to think about my situation and my goals, I don’t feel that far off. Under duress of conversation, though, the constant pressure from all sides feels like its twisting me into something broken.

I think it is easier to ask for and receive advice from someone who has been in debt and recovered than to listen to someone who has never had problems with money. The ones who have struggled have a better understanding of how you can find yourself in that position and the work it takes to get out. That being said, I don’t think there is much you can do to help any of your friends/relatives unless they SPECIFICALLY ask you for advice/assistance. Aside from casually mentioning how you set up a new automatic payment system and it’s saving you tons of time, and it was really easy…. That might catch enough attention to have them ask more questions.
Until people realize and come to accept that they need some kind of assistance, and ask for it, you are probably only going to step on toes by preaching about your own fantastic habits.

Good tip Nancy, definitely it’s good to offer a book ( maybe at Christmas or birthdays etc.) indirectly to someone. We are all up against this powerful ” ME!” that is marketed into all of us. It is difficult for most Americans to step away from the shopping addictions. I try to “share” what has worked for me. Trust me that family members will drag you down and take all your help/money with them.Take care of you and your family first! It took me a few years of study to “change my mind”, and that is what I share with others. In America the overspending is everywhere. It’s going to take years.

This doesn’t seem much different to me than another situation-weight loss. I lost about 40 pounds almost 10 years ago and have kept it off. Over and over again I hear relatives, friends, coworkers, etc complain about gaining weight, not being fit-and they never do anything about it. They eat their junk food and continue to sit on the couch. So what do I do? Continue to lead by example. Continue to work out, eat healthy and maintain my weight loss.

You can’t force people to accept your advice. That being said, you can await an opportunity, continue on your own path, and provide gentle nudges along the way. Sometimes a simple “if you ever want to talk to me about ____, because what I do seems to be working for me” is all another person needs to spur them in the right direction.

I agree with other commenters that friends and family will ignore advice that is (i) unsolicited, (ii) long, and/or (iii) makes them feel bad.

I really like Ann, Dan & Nancy’s idea to lead by example,offering comments in conversation like “we finally got our will written, and I feel so much better. I just used a form I found in this Nolo press book, and it was easy.” Or, “We are hoping to go to New York over fall break, and we’ve set up a savings jar for it that we’re going to put all our change and checks in. The whole family is saving.”

And maybe that’s worked with my siblings, but I can’t tell. They seem think I’m rich, that I did nothing to deserve the money I have, that I cannot possibly have any real problems, and that I should share money instead of opinions or advice.

Our situation is actually a bit different. Some family members still see us and expect us to be big spenders, even though it’s been a few years since we’ve revamped our finances. My husband and I actually get lectured about our own financial situation when family members suggest we should get/buy something (ie. new furniture, a second car, etc) and we try to respond with “it’s not in our list of priorities and it’s not in our budget”. We’re often lectured that we should have enough money because we have two incomes and we have no children. So we’ve finally resorted to “We can’t afford it”, even though we can, but everyone seems more likely to leave us alone after that.

Everyone thinks about money all the time.
The way I see it, there are too many opportunities to talk about personal finances with friends and family.

I and my friends are comfortable enough to rip on each others, and one of the things I used to rip on one of my friend for is his frivolous spending on things he doesn’t need. He and I usually just laugh about it, but I have been seeing changes in his spending habits.
I guess I’m lucky in that regards.
I do make a small talk about my various budgets, student debt repayments, and saving/investments with friends. Those who are sitting on giant debts think about it at least.
I guess this counts as “lead by example”

#1: (Most Importantly) Leading By Example: If People See & Enjoy The Lifestyle You Lead Through The Decisions You Make (i.e. J.D. & His Travelling) They Will Be Naturally Inquisitive & Desire To Follow Suit. Provide Them With The Basic Stepping Stones To Begin The Journey & Encouragement. “Monkey See, Monkey Do” Is The Adolescent Phrase That Resonates Finely With This Concept

#2 Offer Variation & Different Approaches: There Are Many Many Ways To Go About Achieving A Good Night Out Or Even Obtaining A Long Desired Item. Simply Mention Cheaper Routes Used, Or Methods Others Have Utilized & Have Obtained Success With.

#3 Mention Examples Of Others: Pretend To Be In “Awe” Of A More Financially-Successful Mutual Friend, And Even When Unsolicited, Mention Their Achivements And Routes-Used In Order To Potentially Provide A Jolt Of Inspiration To Another Individual.

I Would Like To Also Stress That When Others Claim To Desire “Change” But Do Not Act Upon It (Provided That They Honestly Have Garnered The Correct Information & Opportunity To Do So) Simply Avoid The Topic, Or Listen, Then Casually Alter The Conversation Tangent, As This Can Be Quite Vexating And It Is Most Certainly Unproductive.

@ #2 Pamela: Your Words Of Experience Speak Of Familiarity To My Soul. I Too Have Cared For My Mother Afflicted With Bi-Polar Disorder For The Past 5 1/2 Years, And In December 2010, Have Finally “Abandoned Ship” In Regards To Placing Restrictions On Her Spending Because She Can No Longer Comprehend This Concept. Kudos To Your Effort & Stay Strong. There Are Many Others Of Us Caregivers Out There

I think talking to people about finances is similar to talking to them about losing weight or quitting smoking. I think most people know the basics of improving their situation but don’t actually want to do it. Nagging them isn’t going to change that.

In conversations with others about money, I look for signs that they actually want to change and then I’ll bring up something that worked for me or something I’m doing.

Exception: I work in HR and I *will* nag employees who haven’t signed up for the 401k (and are missing the company’s generous match) about signing up.

Last Christmas when the whole family was together, I started talking about how I had been learning a lot about finances and was doing a lot better at planning for my own future, and told everyone if they wanted to hear any details they could all come over for dinner the next night. Totally optional, no pressure, I just put it out there as casually as I could. To my surprise, EVERYONE came over. I talked briefly about a bunch of stuff (IRAs, emergency funds, etc) but decided one goal would be easier to digest so really talked about getting out of debt, the debt snowball, student loans, that kind of thing.

In the end not everyone seems to have made a change, but several have, and have approached me on several occasions to ask follow up questions. I can’t “fix” everyone, but even if they don’t make any changes right away, I’m just glad I was able to put the topics in their brains as something to think about, and hopefully when they are ready they will all be able to make things better for themselves. I’ll probably do something similar next Christmas and we’ll see what happens. Sometimes leading by example is the best you can do.

I think you’re right, JD, that it’s not so much the money taboo as the fact that people don’t like to be judged, or have their flaws pointed out. Usually the worse you feel about yourself, the less able you are to hear any criticism without getting angry.

I have my own money issues, after a childhood where money was beyond scarce I’m frugal to a fault. I went to a very expensive grad school and am paying off my student loans fast by doubling or tripling my payment each month. I do this by having a second job that I work a LOT of hours at, and by being frugal.

A lot of my friends have asked me for advice about loans and I have helped them look into consolidation, loan forgiveness (we all work in public service, I’m not eligible for it but most of them are), etc, but I haven’t crossed that boundary to telling them that if they really want to pay off their loans they shouldn’t have bought that new car, should cancel their trip to San Francisco, should live in a cheaper apartment and not shop at Banana Republic.

As a social worker it’s my job to talk to people about difficult things, but it’s also my job to know when someone is ready to talk about something. One common mistake that counselors make is skipping a lot of steps in the change process. Someone comes in and says, “I thinking I need to quit smoking crack.” The worst thing to do is to say “Great!” and pack them off to treatment. They’ll leave after 2 days.

It takes people a long time to make a change and it usually involves having no idea there’s a problem, then realizing there is some kind of problem, thinking about changing (the person above), deciding you want the change, taking steps toward the change, completing the change, and then usually periods of backsliding or relapse afterward.

For someone who’s thinking about making a change, the best thing to do is ask about the positive and negative consequences of making or not making the change.

For smoking cigarettes it might be: Well, if I don’t quit, I’ll keep spending my money on it, smelling bad, and it’s bad for my health. But I’ll also get to keep enjoying it and not have to go through the difficult process of quitting. If I quit, it will be really hard and I won’t have an easy way to cope with stress and awkward situations, and I might gain weight, but on the bright side I’ll save tons of money and it will be better for my health.

For something financial it might be: Well, if I don’t change my ways I can keep going out to my favorite restaurants, using my iPhone, and living in my nice apartment… but I’ll always be stressing about money and worried that I’ll lose it all one day when I can’t keep juggling the debt anymore. If I do change, it’s going to be really hard, I’ll have to give up a lot of things I really like, my friends will think I’m weird, I might have to move, and I won’t be able to get good haircuts, but at least I’ll be able to pay off my credit cards and probably stop stress eating so much, and maybe after a long time I can spend money on things I like without feeling guilty about it.

I think that just asking those type of questions is the best way to help someone. If they complain to you about not being able to pay the bills, you can ask, “What changes would you have to make to get to a point where you can pay the bills?” and if they describe a change (say, moving) you can encourage them to talk about what would suck about that scenario, and what would be good about it.

All right, sorry for the long comment, but helping people who don’t want to change is pretty much my thing. It’s hard and it takes a long time and you have to have the patience of a rock.

Yeah, I don’t know — for some reason I decided we needed to read Dave Ramsey’s Total Money Makeover (which we did, but we could have read that years earlier and been a lot better off). I don’t know why I read it when I did. But I made my husband read it and returned it to the library.
The thing in that book that *really* made us change is seeing that in fact you COULD pay off your debt. The examples were perfect for us. If it had only had a couple and none seemed close enough to ours, I don’t think we would have changed (and goodness knows where we’d be today).
One reason money is so hard to talk about is that you really don’t know someone else’s situation. You don’t know how much they earn or save or what’s already in retirement or how big their mortgage is. They do. Their money matters most to them, and they’re the one that knows the most about it. If you could just get them to realize that tiny part of it — that no one else cares about their money like they do — I think that and knowing that (and how) others have turned finances around is the only way to really get people to change.
So in that case, maybe just talking about yourself and how you figured out something financial better than the “expert” could plant that seed.

One person on my staff has severe money problems and is always complaining. I have to be very gentle in my response because I am the boss. Granted, none of us is making a lot of money, but choices matter too.

My approach has been very indirect. I will say something after payday like, “Oh, I paid all my bills last night and the budget pretty much worked out except that I forgot about the extra music lessons, so made this adjustment.” This conveys three ideas: 1, it’s good to pay your bills, 2. it’s good to have a budget, and 3. budgets can be flexible. This is slowly having some effect, as I can tell by the questions she asks.

On the other hand, I don’t understand all her choices. She got a second job in a clothing store to pay her bills, and instead buys clothes?

Not to sound snarky (okay, let’s be honest–when someone starts like that, they do intend it… but I’m not trying to be mean, just direct), but nowhere did Andy say anything about these people approaching *him* for help, nor did JD mention that people say “Hey, JD, what’s your advice?” If people aren’t asking, even if you’re concerned, we really should mind our own business.

Lead by example, maybe practice the soft sell JD mentions (but, be *really* soft unless you’re asked specifically for help), but never directly approach the subject until someone says “I need help” or “Here are my problems… what do you think?”

Otherwise, I think your advice falls on deaf ears (if might anyway even when people ask for it), and you’re just being intrusive.

The only time it might be appropriate is a direct relative who is jeopardizing his or her ability to survive (and I mean, really survive–house about to go into foreclosure or no food on the table and the person is in total denial). Then, maybe step in. Otherwise, just offer help (not advice) to a point where you’re not being taken advantage of and back off.

In my case, and I was quite a case, the problem was impulse control. You can’t help anyone save money, lose weight, quit smoking, etc until they are really, really ready. Now I am amazed at how easy it is to be frugal, but the whole change happened in my emotions. Too bad I didn’t fix this problem sooner, because now I am one of those boomers who saved nothing. Thank you, JD for this site. It has helped a lot.

We do the lead by example thing. My sister, who is four years younger, will often call and ask about things her bank told her about a car loan, how paying rent and utilities works, etc etc. She actively wants to gain more information about the world around her when it comes to finance. She doesn’t always take my advice, and I have to just take the good with the bad. For example, she took out a 6 year car loan on a car that was already 5 years old. About a year ago she decided she “needed” a new car. Well after talking to the dealership, she was about $3,000 underwater on her old car because of the loan she had. Fortunately, she was smart enough to walk away from the car at the dealership and call me. It turned out she was paying a TON in interest, and when I told her what her principal balance was, gave her a payment amount to have the car paid off in 12 months, then she could save for her new car and buy it with cash, she was astounded.

My other friend, he spends like the money will expire before the 2 weeks are over till his next paycheck. He has a large home (for just him!), a 3 car garage, 4 cars, a motorcycle, don’t even get me going on his watch collection! We live on one income, a little less than his income, and we are able to make trips home each year, plus go on one week long cruise each year. We pay for these from passive income and get airline tickets for free from airline miles. (or near free). We invite him on every cruise, and it’s the same story, he can’t afford the trip but he really wants to go. He sees the pictures of our trips, hears about the cool places we have seen the fun things we have done. I tell him that if he stopped buying watches and cars, he could do this too! We have been friends since freshman year of high school, so we are like siblings, but it goes in one ear and out the other. We tell him about our debt repayment plan, how we invest for passive income for travel, how we actively plan our retirement at 45, etc. He listens, he asks questions, so he’s interested, he just can’t take that corner towards a new path for some reason.
I have lost friends due to finances. When we made the transition in our lives about 5 years ago, many of our friends at the time lived like us, over-extended. AS we got things improving, we were able to go back to a little of our old lifestyle, eating out every so often, taking small trips, etc. Within the last three years, we have finally began to see the fruits of our labor. These old friends see us happy, not stressed out about bills, talking about our travels, our next trip, etc. One got very resentful at our newfound “wealth” that we wouldn’t pay for them at dinners or offer to take them on trips with us. (although we told them exactly what we were doing the whole time!). Another set of friends don’t hang out with us anymore because they feel like we have changed now (and maybe we have), but as far as I am concerned, we have changed for the better.

My little sister was incredibly irresponsible with her money. When she graduated from college, I have her a copy of Dave Ramsey’s “Total Money Makeover” for a graduation gift. (To make sure she didn’t hate her gift from me completely, I also gave her a gift card!) I think she was a little annoyed at first. I just told her that I’d read it and it had really opened my eyes, and then dropped the subject. A few months later, my mom said that my little sister had read the book and was going on about all she’d learned. Now she’s making my mom read it! It hasn’t made an instant transformation, but I think it has made her really start to think about things.

I’m for the soft sell. I’ve used opportunities with family and friends, often just by asking how are things going or if they’re doing okay. I let them vent for a while, and I really listen to what they’re saying. Then I often make a single suggestion along the lines of what they are complaining about typically following the form of:
- I had a similar, if not as severe, issue as you are currently complaining about
- I did X and it worked in solving my problem
- You might want to consider if X may help you in your case

Sometimes I might throw out I was thinking of a few different options (e.g. X, Y, and Z) and then say I chose X, but they might find Y or Z better choices for them. Often I’d let it go after that, move on to something else to talk about if I sensed they didn’t want to continue on the topic. Sometimes they would continue the conversation, come back for more information, or not come back to it at all.

Sadly to much “advice”, isn’t. Typically someone who “knows what they need to do” gives a person orders under the cover of “advice”, with the implication that failure to follow their version of advice will result in an ongoing litany of told you so’s. No one I know wants that. I’d recommend that if you are going to give advice, give it with the idea that it is a suggestion. It isn’t a law, it isn’t “the” right way to do something. It’s a suggestion of something you’ve found helped you that may help them.

What just hit me is that it’s an American thing to not discuss money. And it’s not only Russian to talk about it – and give advice – freely. All my foreign friend have no problems saying anything from salary to fixed expenses to fun stuff to where to find cheap groceries and how to save or splurge on hobbies. By local standards I am as frugal as they get, but my parents still manage to nag me from home. So, I’ve been on receiving side too:) By now, I learned to simply tell my stories (if anybody listens or asks questions) instead of rolling my eyes. A few times I offered advice (when was asked). But in general, Americans don’t want advice and don’t ask for it (ashamed? think they are always right?) I guess I’d tell my relative/friend: when you think you’d like to hear me out, let me know. Just like with food choices, drinking or any other habits. And if it’s difficult to be around – don’t be.

We started a Women’s Saving Club so we can talk about some of these touchy topics in a judgment-free space. We each can share our challenges if we want and our goals. Ultimately, we want personal finance and financial topics to longer be a taboo subject among friends and family members.

I don’t understand why one of my sister is different from the others (in the way she manages her finances) even though we grew up in the same household with the same parents and same teachings and examples. Her personality is just different and its bad but if I say one thing, she will start being defensive and say that I’m overly criticizing her.

Whenever she gets into financial troubles (she is in college), my mom bails her out. This is VERY BAD. My mother is afraid that desperation might turn my sister to illegitimate money making schemes… I still think its a bad idea to bail someone out every time they get into trouble.

Finally I am just waiting for her to hit rock bottom because it will happen, and maybe sooner is better than later. Maybe I can still help.

Its probably easier for me because my friends are young adults, but I just make a point of talking frankly about money. Instead of saying “we can’t afford that” I say something about “already filled the Wants portion of my budget”. When we had to pay $300 for sparring gear in class, I shared that we have a special account set aside for large Wants like this. When asked if I use it in case of emergencies, I explained that we have a separate emergency fund. If I see a money article I like, I post it on Facebook. When we started selling our stuff, I posted that I was doing it and why on facebook to see if my friends wanted anything.

I’ve always talked about my life frankly (plans for kids, struggles with school, etc) so I just continue that with my conversations about money.

Overweight cheapskate here.
I don’t have any heart problems, knee surguries, stress fractures or debt. Never been in the hospital for anything but a baby. Never been to a bank for anything except deposits and withdrawls.
We openly discuss money with our adult children.
We are tired of hearing advice on how we do not have enough fun and are way too fat.
How to discuss with others? In my extended family it is only those who make it to the bottom and ask are those who are actually interested in hearing the advice. All other “advice” I leave for my blog:>)

I think it’s only your place to put your (likely unwanted) advice forth in a couple of situations:
- your kids
- to anyone who wants to borrow money from you

The lightbulb moment for my oldest son (almost 23) that seemed to work the best was when we sat down together and added up everything that he’d made since he started working and then added up what he owned for all that money. (One of the steps of YMOYL). But I’ve also been working at him secretly in many other (trying to be) non-judgmental ways. Which backfires because yesterday he lectured ME for buying a new laptop.

Having said that, I do have one friend who I can’t keep my big mouth shut around who is in serious CC debt and has been for the last 25+ years. Since I’ve started my blog, she’s let me help her a bit with her finances, budgeting and investing. I suppose it helps that I’ve been in exactly that same place of being in debt and doing a 360. It’s like water dripping on a rock.

There are several great suggestions mentioned so far! One thing I would like to add is to be positive. Try to look for opportunties to praise a smart financial decision your friend or family member makes. You can ride the coat tails of the praise to interject a nugget of financial wisdom (“I read an article the other day… Or I started doing such and such and then the result was ____”). Then if at all possible re-praise or admire. Needless to say the praise has to be genuine…

These types of issues can arise even within your own immediate family (husband/wife). My husband was laid off for eight months. Now he is back to work. At that time I was planning on paying off the house. When I did this, using my money (we have his, mine and our accounts) I didn’t tell him because I know how he reacts. Our monthly bills/needs went from $4000.00 per month to $2000.00. When I did tell him, after about a month (gee, you didn’t even notice we only needed half the amount of money to make the monthly bills?????) and after he stopped yelling, cussing and carrying on, I made a point to remind him that on unemployment, it is much, much easier to meet monthly expenses when they are now cut in half. Whenever he goes into complaint mode I have to constantly ask him where he would find the extra $2,000.00 every month.

Would I do the same thing again? Absolutely! This is for the family and children as well. The kids and I are extremely open about money and the process of saving and paying. They (especially my daughter who is in junior high) got an extreme sense of well-being knowing that her home was paid off and she didn’t have to worry so much given the employment situation.

People do not change unless they want to and in my experience few want to do so. It takes work! Also, the results aren’t readily tangible for most people. Money in a savings account is not something that registers for a lot of people, not like a new car, clothes and other “things.” While I love talking about money, I only speak about it to those who can appreciate the value in thrift and the activities which promote it.

Does it bother anyone else that we (Americans) never learn about this stuff in all of our 12 to 16 or more years of formal education?? I remember my mom trying to explain to me what an IRA was right after college and just not getting it (or knowing why I should care). Luckily I at least gave in and did what she told me, and I was lucky she was even telling me anything. Did anyone ever have any kind of life skills/civics class in high school that taught them how to rent an apartment, take out a loan, what car insurance is and how it should work? What an IRA or 401k is, or even a savings account, and all that jazz? There’s so much talk in our country right now about two things; education, and the financial crisis – but no one ever considers the fact that no one educates our kids about finances, so of course they go take out a jumbo mortgage if the bank says its okay. Sorry, I’m off on a little tangent, but I think it relates to this, because if we learned about these things in school – I think we’d be more apt to talk about it with each other – and maybe more people would understand more about personal finance in the first place. However, given the lack of funding in education right now, I’m sure this isn’t going to start happening any time soon.

Hey Andy. Get off your high horse. If your friends and family want advice on money, they will ask you for it. Stop “REALLY REALLY REALLY” wanting to give advice to people who aren’t asking for it. Unsolicitied advice on how to handle their money could fix your problems because those people won’t be your friend any more, since you’re an intrusive judgemental jerk to them.

I like the soft shell approach. There are so many books and websites out there. Whenever I see an interesting post on GRS, I always send it to my brothers. They are doing OK financially. One makes good money, but spends a lot on travel. The other just got a job and is super cheap.

@ Liz – funny you should mention that When I was teaching, student loans and financing post-secondary education was part of a grade 10 careers class I taught. Unfortunately, most of the information went right over kids’ heads. Many of them tuned it out the same way they do “useless” information they think they don’t need.

Canada is looking at ways to bring personal finance into the curriculum, but unfortunately I think a lot of the learning has to come from home. It’s one thing to learn about saving in a classroom, it’s something else entirely to have parents who do it and who make you do it too from a young age.

I think the best way is to be comfortable talking about your own finances, especially the parts that are not perfect. Do not make any connection to them and what they are doing wrong – when they are ready, they can connect the dots just fine themselves.

I have a friend who has been struggling with her finances for years. One time I was complaining about how rude one of my parents’ friend was. He made a comment about me apparently getting a more than generous stipend because I could afford X, (he was trying to imply my parents were providing additional support or I must be taking out loans). I retorted that I could afford X because I didn’t have Y. My friend of course commiserated and agreed some people can be so rude and judgmental and we moved on to another topic.

A few weeks after my friend and I had that chat, she mentioned that the not having Y so I could pay for X statement had really made her think. She then asked to borrow one of my books on personal finance, which I had offered her six months earlier. She recently has looked into tracking her spending, but I don’t think she is quite ready to start that yet. However, a year ago, I would have never imagined her comparing software and spreadsheet option, so she is making progress and I think will get there.

I recently split off from whiney crybaby acquaintances who constantly complained about their sorrows, but were unwilling to do anything about it.

One of these areas was money– up to their neck in debt, underwater mortgage, unstable employment, no retirement money… I recommended this website, I recommended books, I recommended professionals, but all they did was whine some more while I wasted my time putting together information for them.

I figured I didn’t have any more time and energy to be entangled with losers, so I told them in unpublishable words to kindly disappear from my life. And by “losers” I don’t mean people who fail at something– we all fail at things all the time. It’s the defeatist attitude I can’t afford to have around me. Even if I’ve become immune to contagion, it’s very draining.

On the other hand, I exchange advice with reasonable friends and family– not all the time, but whenever the situation arises.

I often swap references and information with self-employed friends. We talk about taxes, billing, whatever. I recently recommended the Money Book for Freelancers to one of these friends. She didn’t feel she needed it because she has good professionals working for her, but when I mentioned that “nobody cares more about your money than you do”, she saw my point. That’s a reasonable person. (Which reminds me, I have to call her to ask for her accountant’s phone number, hers charges 1/2 as mine does).

Another friend was slapped with an unexpected tax bill last year and I told her not to fret, she could call EFTPS and arrange to pay installments. Not optimal, but she didn’t have to fork out all the money she didn’t have in one lump sum. I got a big thank you.

A few weeks ago my brother told me he was refinancing his huge mortgage for another 25 years. I was alarmed by his choice and suggested Ramsey and The Millionaire Next Door and other books, but I didn’t convey my alarm to him– I simply pointed out the fact that he was going to pay lots more. He was aware he was trading greater debt for higher monthly cash flow.

I suggested there might be other options, that jobs come and go, that security is never secure, and said “just check out these books before you jump on a 25 year deal, they have some great ideas”. He got the links and thanked me for them. I haven’t followed up on him to see if he read or not– I did my part and the rest is his business. I’m not going to push it or be nosy.

My brother is a high earner, and he’s pretty smart, so I’m not “concerned” about him; but if he finds a way to save and invest more, unlike my high earning parents did, then great.

I’v called him to ask about investments too, so the advice goes both ways.

I dont believe that people should be quiet when you see someone endangering themselves, but the way you approach the subject needs to be very non-judgemental and open. Something like “Recently, I’ve learned some things about my own financial situation and I’ve made some changes that I find to be beneficial to me. I care for you and would be happy to discuss some of the ideas of debt management and retirement planning that I’ve learned. If you ever want to discuss money matters with me, please let me know. I would be happy to have you over for a meal some day where we can talk about it.”

Personally, I would really be interested in having a dinner conversation with some of my peers and friends. Not just for their benefit, but for my own, to get a comparison. Many of my friends have gotten married, had kids, bought houses in the past five years.

I wouldn’t want to lead the conversation, but I also wouldn’t want to invite a professional money manager who would then be trying to sell products to my friends.

Ha, I learned this lesson first-hand recently when talking to my husband’s nephew. He was complaining that he hadn’t been to a dentist in *years* because they’re so expensive and he couldn’t afford it. Without thinking I burst out, “Are you actually saying that with your brand new iPhone in your hand?!?” He, shockingly, did not bow to my wisdom and change his ways on the spot. He was so mad he left the room. He’s making such painful mistakes it’s hard to keep silent, but I know harassing him isn’t going to do a darn thing. I just hope over time he sees that we’re reaping the rewards of saving and investing, and if/when he’s ready to change, we’re more than willing to give him some advice on how to do it.

My husband and I have a similar situation with some friends. They are always broke and have even asked us for money (which we have given them twice). I always listen and gently recommend the total money makeover as it helped our situation immensely. The last time they needed over $300, we gave it to them and I also offered to watch their youngest child if the wife needed to find a part time job. I am a stay at home mom, but have worked part time twice when emergencies have come up. I know it is not fun, but it also doesn’t last forever. I agree that the best thing to do is lead by example and offer to help while they are changing habits.

I forget where I stumbled on this piece of advice (maybe over at The Simple Dollar), but someone suggested setting up a situation where you asked the other what THEY thought the best option was. Tell them your options/thoughts, and ask what they think the best choice is given the pros and cons of each. Once you make your decision, follow up with them and explain why you made that choice. It gets them thinking about it without forcing your advise on them.

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